OPEC+ has announced it is proceeding with a planned oil output increase in April, a move that comes after US President Donald Trump renewed pressure on OPEC and Saudi Arabia to reduce prices.
The increase is the first since 2022 by OPEC+, which includes the Organisation of the Petroleum Exporting Countries, Russia and other allies.
Eight OPEC+ members – Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates – held a virtual meeting and agreed to proceed with the April increase.
“This gradual increase may be paused or reversed subject to market conditions,” OPEC stated. “This flexibility will allow the group to continue to support oil market stability.”
OPEC+, supplying around half of the world’s oil, delayed its output increase to April due to weak demand and rising non-OPEC+ production, including from the US.
Additionally, the group extended some supply cuts until 2026 amid booming US and non-OPEC+ output.
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By GlobalDataIn December 2024, OPEC+ members expressed concerns about a potential resurgence in US oil production with Donald Trump’s return to the presidency.
This development could challenge the group’s market share and undermine efforts to manage oil prices.
Oil has been trading at between $70 and $82 a barrel (bbl) recently, anticipating changes to US sanctions on large oil producers such as Iran, Russia and Venezuela, as well as US tariffs on China that could reduce demand, according to a report by Reuters.
Trump has renewed pressure on OPEC to lower prices, which rose to multi-month highs above $82/bbl in January after his predecessor, Joe Biden, imposed new sanctions on Russia.
Prices have since fallen following hopes that Trump would help secure a peace deal in the Russia-Ukraine war and boost Russian oil flows.
However, Trump’s plans to cut Iran’s oil exports to zero and the recent cancellation of a Chevron licence to operate in Venezuela have prevented prices from falling further.
The combination of these bullish and bearish factors has made decision-making for April complex, according to OPEC+ sources.
The sources also noted that Trump’s plans for global tariffs could further complicate the outlook.
